The six reasons to buy stocks now from the article:

1. Stocks are battered and cheap.
2. Stocks are overdue for a rally.
3. The low risk alternatives are pathetic.
4. It’s not the 1930s.
5. The market shows signs that the worst is over.
6. If not now, when?

Each point is detailed in the full article.

I agree with each point, but it is always stressful to put more into a market that has done nothing but go down for a year. But, I follow Warren Buffett’s philosophy: “We try to be fearful when others are greedy, and greedy when others are fearful.”

Given the level of fear displayed by virtually everything I read, it is clearly a time to be greedy.

Originally posted on pfhacks.com: Kiplinger’s: “Six Reasons to Buy Stocks Now”

This was on no real news.

Nvidia has fallen from its 52 week high of $39.67 to a recent $8.80. It closed today at $10.00. Can it be inferred from this strong counter trend move that they are “in play?”

Maybe. Nvidia has had its share of problems lately. They have had issues with some of their chipsets, which required them to take large charges; are facing increased competition from AMD and Intel; and economic conditions are not favorable.

That being said, Nvidia has no debt, a strong cash position, and a history of producing innovative and desirable products.

This could be a case where a number of investors are recognizing an apparent value, but it seems odd to push the price up on a day when virtually everything is going down. More likely, news of a potential merger has leaked out.

Stay tuned.

Originally posted on pfhacks.com: What’s Up With Nvidia?

As oil continues to drop, the airline stocks have been on an absolute tear. This is in contrast to the overall market which has been generally miserable.

At the time of this writing:

• Delta Airlines (NYSE:DAL) is up 24% today and up 79% in the last three months.
• Northwest Airlines Corporation (NYSE:NWA) is up 22% today and up 80% in the last three months.
• US Airways Group (NYSE:LCC) is up 17% today and up 195% in the last three months.
• AMR Corporation (NYSE:AMR) is up 17% and up 132% in the last three months.

Here is a chart comparing the airlines listed above to

Very impressive, however one must consider what happened to the airlines in the months before oil began its fall.

Here is the same group, except the chart shows a one year time frame.

As you can see, most of these stocks are still way down on a 52 week basis. An important investment skill to learn is to not kick yourself for missing a huge upward move in a group of stocks. Unless you have a detailed knowledge of both the supply and demand dynamics of the oil and airline industries, investing in these stocks at any point in the last year could only be labeled a speculation (read gambling).

Remember the Warren Buffett maxim “There are no called strikes in investing.”

Originally posted on pfhacks.com: Airlines Are Up Huge Today

What is a credit default swap? A credit default swap is a type of credit derivative, meaning its value is derived from the credit risk of a loan, bond, or other type of financial asset. A credit risk is the risk a lender takes that a debtor may not pay back a loan. In its simplest form a credit default swap allows a lender to pay another party for “insurance” against the default of a borrower. A buyer of a credit default swap receives protection against the default of a borrower, and a seller of the credit default swap guarantees that the lender will receive payment. Engaging in this transaction, effectively shifts the risk of default to the seller to the credit default swap, hence the name.

The market for credit default swaps is enormous, totaling $62.2 *trillion* at the end of last year, and has a huge effect on the world’s financial markets. ¹ Take a little time and educate yourself on this subject. For further reading, I recommend you checkout the wikipedia article on credit default swaps.

1. Derivatives and Dangerous Times

Originally posted on pfhacks.com: What is a Credit Default Swap (CDS)?